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CHANGE IN CONTROL AGREEMENT

Change of Control Agreement

CHANGE IN CONTROL AGREEMENT | Document Parties: ANGIODYNAMICS INC You are currently viewing:
This Change of Control Agreement involves

ANGIODYNAMICS INC

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Title: CHANGE IN CONTROL AGREEMENT
Governing Law: New York     Date: 1/23/2009
Industry: Medical Equipment and Supplies     Sector: Healthcare

CHANGE IN CONTROL AGREEMENT, Parties: angiodynamics inc
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Exhibit 10.2

 

CHANGE IN CONTROL AGREEMENT

 

THIS AGREEMENT, dated January 19, 2009 is made by and between AngioDynamics, Inc., a Delaware corporation (the "Company"), and Jan Keltjens (the "Executive").

 

           WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continued employment of key management personnel; and

 

           WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders; and

 

           WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;

 

           NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

 

           1.            Defined Terms . The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

 

           2.            Term of Agreement . The Term of this Agreement shall commence on the date hereof and shall continue in effect through December 31, 2009; provided, however, that effective January 1, 2010 and each January 1 thereafter, the Term that is then in effect shall automatically be extended for one additional year unless the Company has given notice before the January 1 in question that the Term that is in effect at the time such notice is given will not be extended; and further provided, however, that if a Change in Control occurs during the Term, the Term shall expire no earlier than twelve (12) calendar months after the calendar month in which such Change in Control occurs. Notwithstanding the foregoing, this Agreement shall terminate if the Executive ceases to be an employee of the Company and its subsidiaries for any reason prior to a Change in Control.   However, anything in this Agreement (including the preceding sentence) to the contrary notwithstanding, i f a Change in Control occurs and if, within three months prior to the date on which such Change in Control occurs, the Executive's employment with the Company is terminated by the Company without Cause or an event occurs that would, if it took place after the Change in Control, constitute Good Reason for termination of employment by the Executive, and if it is reasonably demonstrated by the Executive that such termination of employment by the Company or event constituting Good Reason for termination of employment by the Executive (a) was undertaken at the request of a third party who has taken steps reasonably calculated to effect the Change in Control, or (b)

 

 

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otherwise arose in connection with or in anticipation of the Change in Control, then for purposes of this Agreement such termination of employment by the Company without Cause or event constituting Good Reason shall be deemed to occur during the 12 month period following the Change in Control and, if the Executive terminates his employment for such Good Reason before the Change in Control, such termination of employment by the Executive shall likewise be deemed to occur during the 12 month period following the Change in Control.

 

           3.            Company's Covenants Summarized . In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and

the other payments and benefits described herein. Except as provided in Section 2, Section 6.3, Section 9.1 or Section 14.2 hereof, no amounts shall be payable under this Agreement unless the Executive's employment with the Company terminates following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment enforceable against the Company nor, except as provided in Section 4 below, enforceable against the Executive, and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.

 

           4.            The Executive's Covenants . The Executive agrees to remain in the employ of the Company, subject to the terms and conditions of this Agreement, if a Potential Change in Control occurs during the Term and the Executive is then in the employ of the Company, until the earliest of (a) the date which is six (6) months from the date of such Potential Change in Control, (b) the date of a Change in Control, (c) the date of termination by the Executive of the Executive's employment for Good Reason or by reason of death, Disability or Retirement, or (d) the termination by the Company of the Executive's employment for any reason; provided that Executive’s agreement to remain in the employ of the Company shall be subject to the condition that no adverse change occurs after the Potential Change in Control in his title, duties, responsibilities, authority, reporting relationships, compensation, benefits or indemnification rights.

 

           5.            Certain Compensation Other Than Severance Payments .

 

           5.1         If the Executive's employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay the Executive his full salary through the date of termination at the rate in effect immediately prior to the date of termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the date of termination under the terms of the Company's compensation and benefit plans, programs and arrangements as in effect immediately prior to the date of termination or, if more favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

 

           5.2         Subject to Section 6.1 hereof, if the Executive's employment shall be terminated for any reason following a Change in Control and during the Term, the

 

 

 

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Company shall pay to the Executive the Executive's normal post-termination compensation and benefits as such payments become due. Any such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company's retirement, insurance and other compensation and benefit plans, programs and arrangements as in effect immediately prior to the date of termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason.

 

                        6.            Severance Payments; Excise Tax .

 

                        6.1         Subject to Section 6.2 and Section 6.3 hereof, if the Executive's employment is terminated following a Change in Control and during the Term either by the Company or by the Executive, other than (a) by the Company for Cause, (b) by reason of death or Disability, or (c) by the  Executive without Good Reason, (any such employment termination being hereafter sometimes referred to as a " Compensable Termination "), then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (" Severance Payments "), in addition to any payments and benefits to which the Executive is entitled under Sections 5 and 6.3 hereof. Notwithstanding the foregoing, the Executive shall not be eligible to receive any payment or benefit provided for in this Section 6.1 unless the Executive shall have executed a release substantially in the form of Exhibit A hereto effective as of the date of the Compensable Termination or a date subsequent thereto and shall not have revoked said release.  The Severance Payments are in lieu of any severance benefits that would otherwise be payable or provided pursuant to any severance plan or practice of the Company:

 

(i)  The Company shall pay the Executive, at the time provided in Section 6.2 below, a lump sum cash payment equal to either:

 

(a) if the termination set forth in section 6.1 occurs after May 31, 2010:  two and a half  (2.5) times the Executive’s bonus that was paid (or that is payable) with respect to the fiscal year of the Company preceding the fiscal year of the Company in which the Compensable Termination occurs; or

 

(b) if the termination set forth in section 6.1 occurs prior to May 31, 2010: two and a half (2.5) times the Executive’s target bonus (which target bonus is 70% of the Executive’s salary).

 

(ii) The Company shall pay the Executive, at the time provided in Section 6.2 below, a lump sum cash payment equal to two and a half (2.5) times the Executive's annual base salary at the rate in effect immediately prior to the Compensable Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (“ Base Salary ”).

 

 (iii) The Company will pay the Executive for all earned but unused vacation leave at the time of the Compensable Termination.

 

(iv) The Company will continue to provide the Executive with Medical, Dental, Prescription, & Vision insurance coverage until the earlier of (A) the second anniversary of the date of his Compensable Termination or (B) the

 

 

 

 

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date on which the Executive accepts an offer of employment that provides similar insurance coverage. Coverage shall be on the same terms and conditions as apply to full-time employees of the Company.

 

6.2          All payments to be made pursuant to subsection (i), (ii), (iii) and (iv) of Section 6.1 above shall be made within thirty (30) calendar days after the date on which a Separation from Service occurs coincident with or following, or within 30 days before, the date on which the Compensable Termination occurs (the “ Separation from Service Date ”) unless on  the Separation from Service Date the Executive is a Specified Employee, in which case such payments shall be made six months and one day after the Separation from Service Date (or, if earlier, the date of the Executive’s death).   For purposes of the preceding sentence, a Specified Employee means a “specified employee”  who is subject to the special rule set forth in subsection (a)(2)(B)(i) of section 409A of the Code and the regulations thereunder (including, without limitation, Proposed Treasury Regulation section 1.409A-1(i)) with respect to such payments.

 

6.3        (A)    Notwithstanding any provision of this Agreement to the contrary, in the event that any payment or benefit received or to be received by the Executive in connection with a Change in Control or the termination of the Executive's employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, including the Severance Payments but excluding any payment to be made pursuant to this subsection 6.3(A), being hereinafter called " Total Payments ") would be subject (in whole or part) to the Excise Tax, then the cash Severance Payments shall first be reduced, and the other payments and benefits hereunder shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments will be subject to the Excise Tax, but only if (i) is greater than or equal to (ii), where (i) equals the reduced amount of such Total Payments minus the aggregate amount of federal, state and local income taxes on such reduced Total Payments and (ii) equals the unreduced amount of such Total Payments minus the sum of (a) the aggregate amount of federal, state and local income taxes on such Total Payments and (b) the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments; provided, however, that the Executive may elect to have the other payments and benefits hereunder reduced (or eliminated) prior to any reduction of the cash Severance Payments. However, if the Executive would realize at least $50,000 more after taxes from the Total Payments if the Company were to “gross up” the Excise Tax on the Total Payments rather than apply the preceding sentence, then the preceding sentence shall be disregarded and the Company shall instead pay the Executive an amount of money that would be sufficient to pay the Excise Tax on the Total Payments. Whether the Executive would realize at least $50,000 more after taxes if he were grossed up, and the amount of the gross up to be paid, shall be determined by assuming (whether or not such is in fact the case) that the Executive is subject to federal income taxation at the highest marginal rate of federal income tax and to state and local income taxation at the highest marginal rates of state and local income taxes in the state and locality of the Executive’s residence on the date on which the Change in Control occurs or at the time provided in Section 6.2 above (whichever is the date as of which the determination in question is made in accordance with the next sentence of this paragraph); provided that in no event shall the Executive’s

 

 

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marginal tax rate including the Excise Tax be assumed to exceed seventy percent (70%) for purposes of calculating the amount of gross up to be paid. The amount of money payable to the Executive pursuant to the two preceding sentences, if any, shall be determined as of the date on which a Change in Control occurs and shall be paid within ten (10) calendar days after the date on which occurs “a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation” within the meaning of section 409A(a)(2)(A)(v) of the Code (whether occurring at the same time as or after the date on which a Change in Control occurs); and if a Compensable Termination occurs after the date on which a Change in Control occurs, the amount of money payable to the Executive pursuant to the two preceding sentences, if any, shall be re-determined as of the date of the Compensable Termination and any balance due the Executive shall be paid at the time provided in Section 6.2 above.

 

  (B)   For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of the accounting firm  which was, immediately prior to the Change in Control, the Company's independent auditor (the " Auditor "), does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code (including, without limitation, by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of the Auditor, constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code. In the event that the Auditor is serving as accountant or auditor for the individual, entity or group effecting the “change in ownership or effective control” or “change in the ownership of a substantial portion of the assets” (within the meaning of Code section 280G(b)(2)(A)) that gives rise to the Excise Tax, or in the event that the Auditor for any reason is unable or unwilling to make the determinations required hereunder, the Executive shall designate another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Auditor hereunder).  All fees and expenses of the Auditor shall be borne solely by the Company.

 

  (C)   At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from the Auditor or other advisors or consultants (and any such opinions or


 
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